Fees are the wrong idea, we should have automatic debt paydown instead

Have you seen what Alchemix is doing for example?

Read this blurb on Alchemix.

Alchemix let’s you reimagine the potential of DeFi by providing highly flexible instant loans that repay themselves over time.

The synthetic protocol token (alUSD) is backed by future yield.


Going with fees is the exact wrong idea. It won’t work, in fact it will deter borrowing.

XVS yeild and VAI stake should be used to paydown existing debt with automatic buybacks.

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Yes, that’s an interesting idea.

Automatic paydown of debt is the golden chalice. Alchemix is generating tons of buzz. Why can’t we do something similar? If we impose large fee increases we will deter borrowing.

There are many other alternatives for borrowing out there. We will drive customer away.

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This is an interesting idea, Bancor’s 1-sided LP protection policy works in a similar fashion i.e. you accrue protection percentage over time.

Do you have more details you could share and/or a suggestions for how it could be implemented on Venus?

Here is what Alchemix is doing.

Alchemix V1 will enable users to deposit stablecoins and mint “alUSD” up to 50% of the deposited amount of DAI. DAI deposited into the Alchemix smart contracts are then routed to [Yearn] vaults where they can start earning yield immediately. This yield can then start to automatically pay down the debt incurred from minting DAI using Alchemix.